Saturday, June 17, 2017

The U.S. Court of Appeals for the Second Circuit recently affirmed the dismissal of LIBOR-manipulation fraud claims brought by a group of hotel-related entities and their investor against a bank and two of its subsidiaries.

In so ruling, the Second Circuit held that:

(a) the borrower and related entities lacked standing to sue because they failed to list their potential claims in their bankruptcy case and the claims were barred by the doctrine of judicial estoppel; and

(b) the claims of the investor and guarantors were untimely and barred by the law of the case.

An Illinois limited liability company obtained a $66 million loan from a local bank to finance the purchase of hotels. The loan contained a formula, tied to the U.S. Dollar London Interbank Offered Rate ("LIBOR"), pursuant to which the borrower paid a net interest rate of approximately 4.8%.

Two years later, the borrower and affiliated guarantors filed bankruptcy in the United States Bankruptcy Court for the Eastern District of Texas, but their schedules failed to list any potential claim LIBOR-fraud claim as an asset. The bankruptcy court approved the debtors' reorganization plan, which still did not disclose any claim against the bank, and the bankruptcy case was closed.

The bankrupt borrower, its corporate affiliates that guaranteed the loan, and an investor of the borrower then sued the bank, its parent and another subsidiary, in the United States District Court for the Southern District of New York, alleging that the banking defendants fraudulently induced the borrower to take out the loan, as the result of which the borrower was forced into bankruptcy.

The trial court dismissed the fraud claims against the lender because they were barred by the applicable statute of limitations, and dismissed the guarantors' and investor's claims "for failure to plead fraud with sufficient particularity."

The plaintiffs appealed, and the Second Circuit previously reversed the judgment against the borrower, but affirmed the dismissal of the other plaintiffs' claims.

On remand, the trial court dismissed the complaint, concluding that because the supposed LIBOR fraud claim was not listed as an asset in the bankruptcy case, the plaintiffs lacked standing to sue or, alternatively, were judicially estopped. The trial court also denied the guarantors' and investor's motion to amend their complaint because "amendment would be untimely and barred by the law of the case."

On appeal for the second time, the Second Circuit explained that "[t]he doctrine of judicial estoppel prevents a party from asserting a factual position in one legal proceeding that is contrary to a position that is successfully advanced in another proceeding … [and] will 'prevent a party who failed to disclose a claim in bankruptcy proceedings from asserting that claim after emerging from bankruptcy."

Although whether judicial estoppel applies depends on the specific facts presented, "[g]enerally, 'judicial estoppel will apply if: [A] a party's later position is 'clearly inconsistent' with its earlier position; [B] the party's former position has been adopted in some way by the court in the earlier proceeding; and [C] the party asserting the two positions would derive an unfair advantage against the party seeking estoppel.'"

Addressing each element in turn, the Court first held that the bankrupt borrower "was required by Fifth Circuit law [where the bankruptcy was filed] to list its LIBOR claim before confirmation" because "[t]he Fifth Circuit has recognized 'that the Bankruptcy Code and Rules impose upon bankruptcy debtors an express, affirmative duty to disclose all assets, including contingent and unliquidated claim.'" This means that "a debtor is required to disclose all potential causes of action."

The borrower was on notice of its potential cause of action because numerous news articles had appeared reporting on LIBOR fraud and the parent of the bank had been sued for LIBOR manipulation by others before the bankruptcy plan was confirmed.

Because under Fifth Circuit bankruptcy precedent the plaintiff's LIBOR-fraud claim was "a known cause of action" when the plan was confirmed, the bankrupt borrower's "failure to list it in the schedule of assets is equivalent to a representation 'than none exist[s].'"

Second, the Court found that "the bankruptcy court 'adopted' [the borrower's] position that it had no LIBOR-fraud claim … when [it] confirmed the plan" because "'adoption' in judicial estoppel 'is usually fulfilled … when the bankruptcy court confirms a plan pursuant to which creditors release their claims against the debtor.'"

Third, even though under its precedent "we do not always require a showing of unfair advantage," the Second Circuit found that "the showing had been made in this case" because the borrower's "assertion of the claims now would allow it to enjoy an unfair advantage at the expense of its former creditors, who had a right to consider the claims during the bankruptcy proceeding."

Finally, the Court affirmed the trial court's denial of the guarantors' and investor's request to amend their complaint because they had not shown good cause after the deadline to amend in the trial court's scheduling order had passed, as required by Federal Rule of Civil Procedure 16(b).

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Thursday, June 15, 2017

The U.S. Court of Appeals for the Eight Circuit recently held that two borrowers' conclusory affidavits by themselves were insufficient to rebut the presumption of delivery under the federal Truth in Lending Act (TILA), 15 U.S.C. § 1635(c), where the borrowers acknowledged in writing at the closing that they received the disclosures required under TILA.

In 2010, before the Supreme Court of the United States' ruling in Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (2015), the borrowers filed this action against a bank alleging that the bank failed to provide all disclosures required under TILA, and seeking rescission of a mortgage loan, money damages, and a declaratory judgment voiding the bank's security interest in loan.

The trial court initially granted summary judgment in favor of the bank and against the borrowers finding that: TILA's one-year statute of limitation barred the borrowers' claims for money damages; TILA's three-year statute of repose barred the borrower's rescission claim; and that borrower's claim for money damages for refusal to rescind failed because the bank did not provide any deficient TILA notices to the borrowers at closing.

The borrowers appealed, and the Eight Circuit affirmed holding, in part, that the borrowers had to file their TILA suit for rescission within three years instead of simply giving notice of their intent to rescind. The Eight Circuit also found that borrowers' money damage claim failed because no defects were apparent on the face of the loan documents.

The Supreme Court of the United States granted certiorari in a similar case because of a circuit split over whether TILA requires notice or actually filing suit to rescind within the three-year statute of repose. Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (2015). The Supreme Court decided that TILA only requires notice of rescission within the three-year period

The Supreme Court subsequently granted the borrowers' petition for certiorari, vacated the Eight Circuit's opinion in light of Jesinoski, and remanded the matter. The Eight Circuit in turn remanded the matter to the trial court for further proceedings.

The parties then filed cross-motions for summary judgment. The borrowers argued that rescission was appropriate because: (1) they did not receive the two required TILA disclosure statements; (2) the statements disclosed materially inaccurate loan finance charges; and (3) the bank did not timely or adequately respond to their rescission notice.

Once again, the trial court granted summary judgment for the bank, holding that the borrowers failed to rebut the presumption of delivery of the disclosures under 15 U.S.C. § 1635(c) – i.e., if a consumer acknowledges in writing that he or she received the required TILA disclosures, "a rebuttable presumption of delivery" arises. Specifically, the district court found that borrowers' self-serving affidavits failed to rebut the presumption.

Additionally, the trial court rejected the borrowers' claim that the disclosure statements were materially inaccurate. Finally, the trial court held that because no TILA violation occurred, the right of rescission expired three days after closing and the bank did not have to respond to the subsequent notice of rescission.

The Eight Circuit next turned to the TILA provisions relevant to this appeal. As you may recall, the TILA provides borrowers an unconditional three-day right to cancel for certain real estate secured loans. 15 U.S.C. §§ 1635(a) (rescission as to original lenders); 1641(c) (extending rescission to assignees).

In addition, a creditor must make required disclosures to "each consumer whose ownership interest is or will be subject to the security interest" including two copies of a notice of the right to rescind and a disclosure regarding the finance charge. 12 C.F.R. § 1026.23(a), (b)(1), 15 U.S.C. § 1602(u). The creditor must make these disclosures "clearly and conspicuously in writing, in a form that the consumer may keep." 12 C.F.R. § 1026.17(a)(1).

Moreover, if the creditor does not provide the required disclosures or notices, then a borrower's "right of rescission shall expire three years after the date of consummation of the transaction." 15 U.S.C. § 1635(f); see 12 C.F.R. § 1026.23(a)(3)(i). However, the Eight Circuit noted that if no disclosure violation occurs, then "the right to rescind is not extended for three years and instead ends at the close of the three-day window following consummation of the loan transaction."

The Eight Circuit first examined the borrowers' claim that they both did not receive a copy of the TILA disclosure statement, as required. 12 C.F.R. § 1026.17(a)(1), (d).

The Court noted that, when a consumer acknowledges in writing that they received a required disclosure, this creates "a rebuttable presumption of delivery thereof." 15 U.S.C. § 1635(c). Here, the borrowers each signed an acknowledgment that they received a complete copy of the TILA disclosure statement. The Eight Circuit observed that this "gives rise to the rebuttable presumption in § 1635(c)."

Initially, the Eight Circuit distinguished Peterson because there the debtors offered sufficient evidence that the bank did not provide the required documents. Specifically, the bank in Peterson admitted its lack of TILA diligence on more than one occasion in letters to the debtors. Also, the borrowers in Peterson asked for the required documents less than a month after closing.

The Court found that this stands in contrast to the present borrowers' conclusory affidavits that they executed eight years after the closing. Further, the Eighth Circuit observed that courts have found that a borrower's conclusory denial that they received the required TILA disclosures, without any other evidence, fails to rebut section 1635's presumptions of delivery. See e.g., Williams v. First Gov't Mortg. & Investors Corp., 225 F.3d 738, 751 (D.C. Cir. 2000).

Additionally, the Eight Circuit distinguished the Stutzka and Cappuccio cases. In Stuzka, the trial court had found that plaintiff "was not given her copies of the closing documents." Further, the Eight Circuit noted, Cappuccio does not hold that any manner of affidavit is sufficient to rebut section 1635(c)'s presumption of delivery and defeat a summary judgment motion.

Thus, the Eight Circuit held that the trial court properly entered summary judgment in favor of the bank on the borrowers' rescission claim because section 1635's three-day window bars their claim.

The Court next turned to the borrowers' claim that they are entitled to rescission under TILA based on materially inaccurate finance charges in the disclosure statements.

The borrowers raised this issue for the first time in this appeal. Thus, the Eight Circuit found that the borrowers waived this argument. Moreover, the Eight Circuit concluded that even if the borrowers did not waive their argument, their claim would still fail.

As you may recall, a finance charge is deemed accurate if "the amount disclosed as the finance charge does not vary from the actual finance charge by more than an amount equal to one-half of one percent of the total amount of credit extended." Beukes v. GMAC Mortg., LLC, 786 F.3d 649, 652 (8th Cir. 2015) (quoting 15 U.S.C. § 1605(f)(2)(A)); see also 12 C.F.R. § 1026.23(g)(1) (describing that amounts within one-half of one percent of the accurate amount shall be considered accurate).

The original lender extended $404,000 in credit to borrowers. As such, the Eight Circuit observed that borrowers would be entitled to rescission if the disclosure statement's finance charges improperly varied by more than $2,020.

However, the borrowers claimed a $1,955 hazard insurance premium charge should have been only $1,205 and challenged various other fees. They claimed these amounts total $2,172.40.

The Eight Circuit rejected the borrowers' math because insurance premiums are not expressly included in the finance charge under TILA, 15 U.S.C. § 1605(c) (premiums for property damage insurance may be excluded from the total finance charge if the creditor notifies borrower that they may obtain the insurance of their choice). The disclosures here advised borrowers of their rights to obtain insurance. Also, the Court noted, the claimed error does not violate the TILA because it is a larger and not smaller charge. See 12 C.F.R. § 1026.23(g)(1)(ii) (an inaccuracy is tolerated if it is "greater than the amount required to be disclosed").

Subtracting the disputed insurance premium, the total fell below the $2,020 threshold. Thus, the Eight Circuit concluded that even if borrowers did not waive their TILA claim it still failed on the merits.

Finally, the Eight Circuit turned to borrowers' argument that the bank's lien is void because it failed to timely respond to their notice of rescission. The Eight Circuit flatly rejected this argument. The Court held that the bank did not violate the TILA at closing. Therefore, borrowers' right to rescind did not extend beyond three days and this claim is barred.

Accordingly, the Eight Circuit affirmed the trial court's summary judgment order in favor of the bank and against the borrowers.

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Tuesday, June 13, 2017

The U.S. Court of Appeals for the Eighth Circuit recently affirmed the dismissal of a putative class action brought under the federal Telephone Consumer Protection Act (TCPA) for making unsolicited telemarketing calls.

The Eighth Circuit held that the plaintiff had given prior express written consent to receive the calls, and the trial court properly considered redacted business records that showed the consumer had given his prior express written consent to be called.

A consumer who purchased a medical device filed a putative class action against the seller, alleging that it violated the TCPA by making telemarketing calls and leaving voicemail messages "soliciting him to buy home medical supplies."

The defendant moved to dismiss for failure to state a claim, arguing that the plaintiff had given his prior express written consent to contact him at his cellular phone number using an auto-dialer or prerecorded messages. In support, the defendant attached a sworn declaration from its employee authenticating heavily-redacted business records that purported to show the plaintiff gave prior express written consent to the autodialed calls and prerecorded messages.

The trial court granted the defendant's motion to dismiss, holding that "lack of prior express consent" was a required element in order to state a prima facie case under the TCPA, and that it could consider the business records attached to the declaration because they fell within the scope of the pleadings and such records showed plaintiff gave his prior express written consent to be called on his cell phone "relating to the purchase of replacement supplies for the medical device he purchased …." The plaintiff appealed.

On appeal, the Eighth Circuit explained that the TCPA "prohibits any person from making 'any call (other than a call made … with the prior express consent of the called party) using an automatic telephone dialing system or an artificial or prerecorded voice … to any telephone number assigned to a … cellular telephone service.'" It also provides a private right of action for violations, and confers on the Federal Communications Commission ("FCC") certain powers to adopt regulations implementing the Act.

In 1992, the FCC issued an administrative ruling providing that "persons who knowingly release their phone numbers have in effect given their invitation or permission to be called at the number which they have given, absent instructions to the contrary."

In 2008, the FCC issued a ruling clarifying "that autodialed and prerecorded message calls to wireless numbers that are provided by the called party to a creditor in connection with an existing debt are permissible calls made with the 'prior express consent' of the called party. … However, 'prior express consent is deemed to be granted only if the wireless number was provided by the consumer … during the transaction that resulted in the debt owed.' In addition because 'creditors are in the best position to have records … showing such consent,' if a question arises as to whether express consent was provided, 'the burden will be on the creditor to show it obtained the necessary prior express consent.'"

Finally, in 2015, the FCC extended its 2008 rule beyond debt collection calls, such that "regardless of the means by which a caller obtains consent, … if any question arises as to whether prior express consent was provided by a call recipient, the burden is on the caller to prove that it obtained the necessary prior express consent."

The Court rejected the plaintiff's argument that the trial court erred in ruling that prior express consent is part of his prima facie case rather than an affirmative defense on which defendant bears the burden of proof, reasoning that "[r]egardless of which party bears the ultimate burden of persuasion on the question of consent, [plaintiff's complaint] would not have stated a facially plausible claim for TCPA relief without an allegation that [defendant] did not have his 'prior express consent.'"

Thus, the Eighth Circuit held, "whether consent is an affirmative defense is irrelevant to the Rule 12(b)(6) inquiry under [the Supreme Court's holding in Ascroft v. Iqbal]. If an affirmative defense 'is apparent on the face of the complaint … [it] can provide the basis for dismissal under Rule 12(b)(6)."

The Court also rejected the plaintiff's argument that "his prior express consent was not apparent from the face of the Complaint," and the exhibits attached to the defendant's declaration were not "embraced" by the four corners of the complaint.

First, the Eighth Circuit found that the declaration exhibits were embraced by the complaint because it "alleged breach of a statutory TCPA duty arising out of a contractual relationship, [appellant's] purchase of a medical device …." Because the complaint contained the conclusory allegation that plaintiff did not give his express consent and the declaration exhibits were "documents reflecting the contractual relationship that refute this conclusory allegation[,]" the trial court did not err by concluding that the exhibits were embraced by the pleadings and could be considered on a motion to dismiss without converting it to a motion for summary judgment.

Second, the Court found that "authenticity is a bogus issue" because although plaintiff's counsel objected to the trial court considering the exhibits because they were redacted, he never argued that they "were not properly authenticated in accordance with Rule 901 of the Federal Rules of Evidence."

Thus, the Eighth Circuit held that the trial court did not commit plain error in concluding that the exhibits "were properly authenticated documents reflecting an aspect of the parties' contractual relationship."

The Court further explained that plaintiff's counsel did not respond to the argument of defendant's counsel at the hearing on the motion to dismiss that the redactions were required by the federal and state laws prohibiting the release of a person's protected health information without written consent.

The Eighth Circuit also noted that the plaintiff did not give his written consent to disclose the redacted information, or "affirm or deny" that he signed the exhibits and "are or are not part of his contractual relationship with one or more [defendant-related] entities, or … ask the court to convert the motion to dismiss into one for summary judgment and permit limited discovery on the issues of prior express consent, the scope of any prior consent given, and the authenticity of [the exhibits]. The reason for this tactical decision is not hard to infer, because opening up these fact-intensive issued would likely preclude class certification or establish that [plaintiff] was not a member of the putative class."

Because the complaint showed a contractual relationship, the trial court "did not err in considering the documents as reflecting [plaintiff's] pre-purchase consent." The district court's judgment was affirmed.

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Monday, June 12, 2017

The Supreme Court of the United States today held that a purchaser of a defaulted debt who then seeks to collect the debt for itself is not a "debt collector" subject to the federal Fair Debt Collection Practices Act.

The issue before the Court was whether a purchaser of defaulted debt meets the FDCPA's definition of a "debt collector" as one who "regularly collects or attempts to collect . . . debts owed or due . . . another." 15 U.S.C. §1692a(6).

Here, a finance company acquired defaulted loans from another finance company, and then began to collect on those loans. The petitioners argued this activity made the buyer a debt collector subject to the FDCPA.

The U.S. Court of Appeals for the Fourth Circuit disagreed because the debt purchaser was not seeking to collect a debt "owed . . . another." Our prior update regarding this ruling is included below.

The Supreme Court affirmed in a unanimous decision.

The opinion did not consider whether a purchaser of defaulted debt is engaged "in any business the principal purpose of which is the collection of any debts." §1692a(6).

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The U.S. Court of Appeals for the Fourth Circuit recently held that the fact that a debt is in default at the time it is purchased by a third party does not necessarily make that third party a "debt collector" subject to the federal Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA").

Instead, the Court held that the respective definitions of "creditor" and "debt collector" under the FDCPA control whether an entity is a debt collector subject to the FDCPA.

Four Maryland consumers took out separate loans with a lender to purchase their respective automobiles. The loans were originally made by a lender that was not a defendant in this action. After the plaintiffs were unable to make payments, the lender foreclosed on the loans, leaving the plaintiffs obligated to pay deficiencies.

The company then sold the defaulted loans to the defendant finance company ("Finance Company") as part of an investment bundle of receivables, and the Finance Company thereafter attempted to collect on the loans it had purchased.

The plaintiffs filed a class action complaint against the Finance Company, alleging that the Finance Company violated the FDCPA by supposedly engaging in various prohibited collection practices.

The plaintiffs alleged that the Finance Company was a "debt collector" under the FDCPA because: (1) the debt they were attempting to collect was in default at the time the Finance Company purchased it; (2) the debt was originally "owed or due [to] another"; and (3) that because the Finance Company had been a debt collector prior to purchasing their loans, the Finance Company remained a debt collector after purchasing those same loans from the lender.

The Finance Company moved to dismiss on the ground that the plaintiffs "did not allege facts showing that…[it] qualified as a 'debt collector' subject to the FDCPA." As you may recall, the FDCPA generally covers only the conduct of debt collectors, not creditors, "generally distinguishing between the two based on whether the person acts in an agency relationship with the person to whom the borrower is indebted."

The lower court agreed and dismissed the complaint, holding that the Finance Company "was collecting debts on its own behalf as a creditor and that the FDCPA generally does not regulate creditors collecting on debt owed to themselves."

In affirming the dismissal, the Fourth Circuit held that after the Finance Company purchased the plaintiffs' loans, it became a creditor, and that because the Complaint only alleged collection activity after it became a creditor, its collection activity was not subject to the FDCPA.

The Fourth Circuit rejected each of the plaintiffs' arguments, noting that each argument "contains several interpretational and logical flaws such that their interpretation of the FDCPA ultimately stands in tension with its plain language."

Rejecting the plaintiffs' first argument that the Finance Company was a "debt collector" because the loans it purchased had been in default, the Court held that the "default status of a debt has no bearing on whether a person [or entity] qualifies as a debt collector under the threshold definition set forth in 15 U.S.C. § 1692a(6)."

The plaintiffs asserted that because 15 U.S.C. § 1692a(4) "excludes from the definition of creditor 'any person to the extent that he receives an assignment of a debt in default solely for the purpose of facilitating collection of such debt for another' such person must of logical necessity be a debt collector."

The Fourth Circuit held that the plaintiffs argument was flawed in that it (1) ignores the requirement that the person must have received the debt "solely for the purposes of facilitating collection"; and (2) because it fails to address whether the Finance Company actually fits the definition of "debt collector" (and instead appears to attempt to prove a "negative pregnant").

Accordingly, the Court held that the default status of the debt is not determinative as to whether an entity is a debt collector subject to the FDCPA.

Importantly, the Fourth Circuit held that the determination of whether an entity is a debt collector "is ordinarily based on whether a person collects debt on behalf of others or for its own account." And, that the "main exception" to that general rule is "when the 'principal purpose' of the person's [or entity's] business is to collect debt."

The Court further noted, "[w]ith limited exceptions a debt collector [subject to the FDCPA] thus collects debt on behalf of a creditor. A creditor, on the other hand, is a person to whom the debt is owed, and when a creditor collects its debt for its own account, it is not generally acting as a debt collector."

Moreover, Fourth Circuit noted, the FDCPA in § 1692a(6) "defines a debt collector as (1) a person whose principal purposes is to collect debts; (2) a person who regularly collects debts owed to another; or (3) a person who collects its own debts, using a name other than its own as if it were a debt collector."

Applying this definition to the Finance Company, the Court held that the Finance Company did meet any of the above three definitions of "debt collector" under the FDCPA.

For one, its "principal purpose" was not to collect debts because it also engaged in a substantial amount of direct lending and investing. In addition, as alleged in the complaint, the Finance Company was not collecting on debts "owed to another," but instead collecting own "debts for its own account" because its collection activity only occurred after it purchased the defaulted debt from the lender.

Thus, the Fourth Circuit held that the Finance Company did not fit the first definition of a "debt collector" provided in the FDCPA.

The Court also held that the Finance Company did not meet the second definition of "debt collector" because the plaintiffs had not (and could not) show that the Finance Company "regularly" collected debts "owed to another" or that it was "doing so here." Rather, as the Court explained, the Finance Company was plainly collecting debts "owed to it…not to another…making it a creditor" and thus not subject to the FDCPA.

Finally, the Fourth Circuit held that the Finance Company plainly did not meet the third definition of "debt collector" because it was not using a name other than its own in collecting the debts.

In rejecting the plaintiffs' argument that the debt was originally due or owed to another, the Court held that there was no support for that argument in the plain language of the FDCPA itself.

Instead, the Court held, to the extent "Congress was regulating debt-collector conduct, defining the terms 'debt collector' to include a person who regularly collects debts owed to another, it had to be referring to debts as they existed at the time of the conduct that is subject to regulation." Thus, the Court held, as the debts were not "owed to another" but instead owned by the Finance Company at the time it engaged in the allegedly prohibited practices, those alleged practices were not subject to FDCPA regulation.

Likewise, in rejecting the plaintiffs' remaining arguments that the Finance Company had previously been a debt collector (or acted as a debt collector for other loans), the Fourth Circuit held that the plaintiffs grossly misinterpreted the FDCPA:

Under the plaintiffs' interpretation, a company such as [the Finance Company]—which as a consumer finance company, lends money, services loans, collects debt for itself, collects debt for other, and otherwise engages in borrowing and investing its capital—would be subject to the FDCPA for all of its collection activities simply because one of its several activities involves the collection debts for others.

The Court held that "Congress did not intend this." Rather, the Fourth Circuit held that Congress "aimed [the FDCPA] at abusive conduct by persons who were activing as debt collectors" as explained in § 1692(e) of the FDCPA. Thus, the Court held that the Finance Company is "therefore subject to the FDCPA only when acting as a 'debt collector' in § 1692a(6)" and not when it is engaging in activity to collect on its own debts "as a creditor."

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PLEASE NOTE:

The editor and sponsoring law firm of this blog represent and serve banks, lenders, loan buyers, loan servicers, debt collectors, and other financial services companies. We do not represent consumers.

Please note that any communications or information obtained may be provided to our clients, including for the purpose of debt collection.

The information in this blog and related updates is general in nature, and should not be considered legal advice.

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Ralph Wutscher's practice focuses primarily on representing depository and non-depository mortgage lenders and servicers, as well as mortgage loan investors, distressed asset buyers and sellers, loss mitigation companies, automobile and other personal property secured lenders and finance companies, credit card and other unsecured lenders, and other consumer financial services providers. He represents the consumer lending industry as a litigator, and as regulatory compliance counsel.

Ralph has substantial experience in defending private consumer finance lawsuits, including cases ranging from large interstate putative class actions to localized single-asset cases, as well as in responding to regulatory investigations and other governmental proceedings. His litigation successes include not only victories at the trial court level, but also on appeal, and in various jurisdictions. He has successfully defended numerous putative class actions asserting violations of a wide range of federal and state consumer protection statutes. He is frequently consulted to assist other law firms in developing or improving litigation strategies in cases filed around the country.

Ralph also has substantial experience in counseling clients regarding their compliance with federal laws, and with state and local laws primarily of the Midwestern United States. For example, he regularly provides assistance in connection with portfolio or program audits, consumer lending disclosure issues, the design and implementation of marketing and advertising campaigns, licensing and reporting issues, compliance with usury laws and other limitations on pricing, compliance with state and local “predatory lending” laws, drafting or obtaining opinion letters on a single- or multi-state basis, interstate branching and loan production office licensing, evaluations and modifications of new or existing products and procedures, debt collection and servicing practices, proper methods of responding to consumer inquiries and furnishing consumer information, as well as proposed or existing arrangements with settlement service providers and other vendors, and the implementation of procedural or other operational changes following developments in the law.

Ralph is a member of the Governing Committee of the Conference on Consumer Finance Law. He is also the immediate past Chair of the Preemption and Federalism Subcommittee for the ABA's Consumer Financial Services Committee. He served on the Law Committee for the former National Home Equity Mortgage Association, and completed two terms as Co-Chair of the Consumer Credit Committee of the Chicago Bar Association.

Ralph received his Juris Doctor from the University of Illinois College of Law, and his undergraduate degree from the University of California at Los Angeles (UCLA). He is a member of the national Mortgage Bankers Association, the American Bankers Association, the Conference on Consumer Finance Law, DBA International, the ACA International Members Attorney Program, as well as the American and Chicago Bar Associations.

Ralph is admitted to practice in Illinois, as well as in the United States Court of Appeals for the Seventh Circuit, the United States District Courts for the Northern and Southern Districts of Illinois, and the United States District Court for the Eastern District of Wisconsin, and has been admitted pro hac vice in various jurisdictions around the country.